Research:Publications:Working Papers FY2010(english-8,japanese-4)

Japan's New Trade Policy: from GATT and the WTO to FTAs / URATA, Shujiro

2011.03.31

Working Papers

Excellent papers on Asian regional integration, which are prepared mainly by young researchers such as GIARI members, co-researchers, research fellows, and research assistants, will be published as working papers. Contributed papers, written in English or in Japanese, will be reviewed and examined by the editorial committee before publication. GIARI donates published papers to the libraries of Waseda and other related universities, research organizations, etc.

3.4 Promotion of Economic Growth and Political and Social Stability in East Asia

3.5 Securing Resources and Regional Policies

3.6 Economic Impact on Japan

4. Obstacles to the Promotion of FTAs

4.1 Economic Obstacles

4.2 Non-economic Obstacles

5. Evaluation of Japan’s FTAs

5.1 Quantitative Evaluation

5.2 Qualitative Evaluation

5.3 Effects of FTAs on Trade and Direct Investment

6. Conclusion: Towards the Promotion of FTAs

Introduction

Since the beginning of the 21st century, Japan has aggressively promoted Free Trade Agreement (FTA) negotiations, particularly with the countries of the Association of Southeast Asian Nations (ASEAN). Currently, Japan has put a total of 11 FTAs into effect, ten bilateral FTAs with countries such as Singapore, and one regional FTA with ASEAN, and is carrying out negotiations for five further FTAs with countries such as India and Australia. FTAs represent a policy of preferential trade agreements between specific countries aimed at eliminating tariff and non-tariff barriers and as such run contrary to the most favored nation treatment (equal treatment to WTO members) that is the basic principle of the World Trade Organization (WTO). From 1956, when it joined the General Agreement on Tariffs and Trade (GATT), which was the predecessor to the WTO, Japan implemented a trade policy as a member of GATT and the WTO with a focus on multilateral trade liberalization negotiations based on most favored nation treatment. With this in mind, Japan’s proactive entry into FTAs in recent years can be interpreted as implying a significant switch in its trade policy.

In this paper, I examine Japan’s FTA strategy from a variety of perspectives with the above situation in mind. In the next section, section 2, I give an overview of the trends and characteristics of Japan’s FTAs. In section 3, I analyze the motivation behind Japan’s FTA strategy, and in section 4, I highlight the obstacles to entry into FTAs. In section 5, I examine Japan’s existing FTAs from both quantitative and qualitative perspectives and analyze the impact of FTAs on trade and direct investment. In the last section, section 6, I present the strategies that Japan should adopt in promoting an FTA strategy in the future.